Finance Advisory Committee

MINUTES JOINT CITY COUNCIL AND FINANCE ADVISORY COMMITTEE MEETING CITY OF DEKALB NOVEMBER 16, 2017 The City Council of DeKalb, Illinois held a Joint City Council and Finance Advisory Committee meeting on November 16, 2017, in the City Council Chambers of the DeKalb Municipal Building, 200 South Fourth Street, DeKalb, Illinois. Mayor Smith called the Special City Council meeting to order at 5:02 p.m. Finance Advisory Committee Chair Peddle called the Special Finance Advisory Committee meeting to order at 5:03 p.m. 1. ROLL CALL Deputy City Clerk Carri Parker called the roll, and the following City Council members were present: Alderman Bill Finucane, Alderman Mike Marquardt, Alderman Pat Fagan, Alderman Kate Noreiko, Alderman Mike Verbic, Alderman Tony Faivre, and Mayor Jerry Smith. Alderman Mike Marquardt arrived at 5:03 p.m. Alderman David Jacobson arrived at 5:06 p.m. Finance Advisory Committee members present were: David Conlin, Lynn Neeley, Steve Parker, Ron Partch, Tom Teresinski, and Chair Mike Peddle. City staff present were: City Manager Anne Marie Gaura, Assistant City Manager Patty Hoppenstedt, Finance Director Molly Talkington, City Attorney Dean Frieders, Police Chief Gene Lowery, Fire Chief Eric Hicks, Community Development Director JoEllen Charlton, Public Works Director Tim Holdeman, Information Technology Director Marc Thorson, Human Resources Director Cris Randall, Assistant Finance Director Robert Miller, Code Compliance Coordinator Carl Leoni, Utilities Superintendent Bryan Faivre, Accountant Susan Hauman, Management Analyst Patrick DiDiana, Management Analyst Ray Munch, Management Analyst Aaron Stevens, and Deputy City Clerk Carri Parker. Mayor Smith explained the purpose of the Special Joint City Council and Finance Advisory Committee (FAC) meeting. He mentioned that the City’s department heads would be presenting the details of the proposed expenditure reductions for their departments, Finance Director Talkington would be presenting the revenue projections, and FAC Chair Peddle would present the FAC recommendations. He added that Council and the FAC would then discuss the information presented. He stated that decisions regarding the FY2018 would not be made at this meeting. FAC Chair Peddle explained that the FAC had met several times in the previous months. He stated that the role of the FAC is to provide the best financial advice based on each FAC member’s experience within the finance world. He added that the City has  Special Joint City Council and Finance Advisory Committee Meeting November 16, 2017 Page 2 of 4 a financial policy regarding funding pensions and in the past Council has failed to meet the fiduciary responsibility to adhere to those polices or meet the fiduciary responsibility to the City. He mentioned the outcomes of the Council not meeting the fiduciary responsibility. Mayor Smith mentioned that at the November 13, 2017,City Council meeting, staff was directed to find overall expenditure cuts from 2.5% – 5%. 2. FY2018 PROPOSED ANNUAL BUDGET City Manager Gaura provided an overview of the steps taken by staff to meet the requested information from Council of finding 5% reductions in the general fund. She added that the recommendations of the tentative Tax Levy is based on the Equalized Assessed Value (EAV) and the City’s budget policies. She explained that the presentations are based on two things: (1) the property tax levy including only an increase of the projected EAV increase, and (2) a pension expenditure estimate of a 7.5% investment return rate with other non-property tax revenue. She stated that based on direction from Council, there are three options provided: (1) a $700,000 reduction in ongoing costs to reach a 25% fund balance, (2) an overall 2.5% reduction, and (3) an overall 5% reduction. She added that implementing these reductions will affect City services. Each City department head explained the variety of cuts provided in the agenda memo. Alderman Marquardt left the meeting at 6:15 p.m., and returned at 6:17 p.m. City Manager Gaura communicated some expenditure assumptions that have affected the FY2018 to assist in the requested reductions. She added an explanation of the staffing plan handout. Finance Director Talkington explained the changes to the Five Year Financial Plan based on the proposed reductions. She added that the assumptions are based on the three scenarios: (1) a $700,000 reduction in ongoing costs to reach a 25% fund balance, (2) an overall 2.5% reduction, and (3) an overall 5% reduction. Finance Director Talkington also addressed the revenue assumptions. A discussion ensued between Council members, FAC members, and City staff on the pension investment return rate assumption. Alderman Jacobson left the meeting at 6:27 p.m., and returned at 6:29 p.m. Alderman Finucane left the meeting at 6:30 p.m., and returned at 6:32 p.m. A discussion ensued between Council members, FAC members, and City staff on the future staffing plans and truth in taxation levy amount. Special Joint City Council and Finance Advisory Committee Meeting November 16, 2017 Page 3 of 4 Chair Peddle summarized the FAC recommendations and the future plans for the FAC relative to future planning. A discussion ensued between Council and FAC members with regard to the effect on Moody’s based on the recommendations. FAC member Neeley left the meeting at 7:34 p.m., and returned at 7:37 p.m. Alderman Fagan left the meeting at 7:36 p.m., and returned at 7:39 p.m. Alderman Marquardt left the meeting at 7:52 p.m., and returned at 7:54 p.m. 3. PUBLIC PARTICIPATION Dwayne Brown mentioned his projections of wage growth. He presented quotes by various Aldermen and Mayor Smith from the previous Council meeting. He added not to add more tax to the overburdened taxpayer. He stated that he’d rather see it cut and be done with. City Manager Gaura left the meeting at 7:57 p.m., and returned at 8:00 p.m. William Heinisch stated that growth needs to be the primary focus. He is concerned about the sales tax increase as he cannot compete with surrounding communities. He added that if the sales tax is increased he will have to absorb the increase, which financially is not feasible. Sara Dorner, AFSCME Representative, spoke in reference to City employees and their dedication to the City. She asked the Council and FAC to think about City services, and to consider the people who provide those services for the City. Jacob Burlingame stated he would like to see the pensions fully funded. He added that with the increase in crime, it is not a good time to cut funding in police and fire services. He stated that if there was a choice in protection services to raising taxes, he would support an increase in taxes. Bessie Chronopoulos stated she is happy that Mayor Smith is fulfilling his promises. She commended the talent of the FAC members and taking the steps to work together to discuss what needs to be done. She stated that the budget process should be completed earlier and it is not fair to discuss these important topics in crunch time. Council members shared their thoughts on the presented information and their suggestions on future decisions relative to the FY2018 budget. 4. ADJOURNMENT MOTION  Special Joint City Council and Finance Advisory Committee Meeting November 16, 2017 Page 4 of 4 FAC Chair Peddle moved to adjourn the Special meeting; seconded by Alderman Marquardt. VOTE Motion carried on a voice vote. City Council 8-0 voice vote: Aye: Jacobson, Finucane, Marquardt, Fagan, Noreiko, Verbic, Faivre, Smith. Nay: None. FAC 6-0 voice vote: Aye: Conlin, Neeley, Partch, Teresinski, Parker, Peddle. Nay: None. Mayor Smith declared the motion passed and the meeting adjourned at 8:31 p.m. _____________________________________ CARRI PARKER, Deputy City Clerk Approved by City Council: December 11, 2017. Approved by the Finance Advisory Committee: January 30, 2018. The Finance Advisory Committee have not approved these minutes.